China Duty Free (CDF), under China’s largest state-owned tourism enterprise China Tourism (CTG), has sealed a memorandum of understanding with Vietnam’s multi-sector corporation Imex Pan Pacific Group (IPPG) to open three duty-free shops in the Southeast Asian nation.
The deal conclusion was part of a Vietnam trip by the CDF and CTG mission on March 27-30.
Under the agreement, the three duty-free stores will be located in Ho Chi Minh City, Nha Trang town (the south-central province of Khanh Hoa), and Mong Cai town (the northern province of Quang Ninh).
The Bac Luan 1 duty-free shop in the Mong Cai border area is slated to open this year, while the downtown Nha Trang outlet will be developed in 2024 and launched next year. The duty-free shop in HCMC will debut in District 1, with the opening date yet to be revealed.
The operation of the three duty-free stores in Vietnam is set to give a boost to tourism revenue growth and contribute to realizing the country’s annual goal of 25 million international tourist arrivals, said chairman of IPPG Johnathan Hanh Nguyen.
According to a survey conducted by Hotels.com, Chinese travelers spend an average of $930 abroad, with 58% of this expenditure allocated to shopping, particularly for high-end products.
CDF is the largest duty-free store operator in China. In 2023, it generated $9.3 billion in revenue and $939.4 million in net profit, up 24.1% and 24.07% year-on-year, respectively.
IPPG is the leading duty-free shop operator in Vietnam, holding 80-90% of the market share. It has partnered with global duty-free shop operators such as DFS, Dufry, and Lotte to run outlets in the country, particularly at major airports.
In the first quarter of this year, Vietnam welcomed 890,000 Chinese tourists out of 4.6 million foreign visitors, up 653% and 72% over the year, respectively.
China is currently Vietnam's second-largest tourist market, behind South Korea. Before the pandemic, China was the largest source of travelers to Vietnam, making up 30% of total visitors, according to the Vietnam National Authority of Tourism.